Tips for Establishing Credit Worthiness

Understanding the basics of credit and your credit score is critical to achieving the best deals when it comes to your credit - at such times as applying for car loan, a home loan, or possibly even when applying for certain jobs. Credit worthiness is more than indication of your ability or willingness to have paid your past credit obligations - to many it is also considered a measure of character. Having a high credit score tells anyone who’s looking, that you take your debts and financial obligations very seriously. Having a low credit score on the other hand is an indication - fairly or not - that you do not take as seriously your obligations, or fulfill your promises to pay lenders who offer you money on a credit basis.

Perhaps you have encountered troubles with your employment situation or medically you were taken off your feet for awhile and unable to pay your debts, or maybe you’re young, fresh out of school without much of a credit history to speak of. How do you go about building up your credit worthiness and keeping that reputation with you for a very long time? Here are some of the steps you can take to build a solid credit worthiness and credit score that you can rely on for the future.

• Start simple: Whether you are new to credit or are trying to repair your credit, the best thing you can do get off to a good start is to take out a single, simple line of credit like a secured credit card, or a student credit card if you are in university. Treat this card like gold once you have it, no matter that the maximum limit it on it may be small. Make charges to it and then pay it off completely each month if possible. Do this for a year and your credit worthiness will show significant improvement.
• Pay your bills on time: Even things like utility bills being paid late regularly can affect your credit rating and credit worthiness. Your credit score can be raised as much as 20 points in just two months if you paid all of your bills on time during that period.
• Keep your balances low: If you have credit cards, don’t max them out - ever - unless you plan to pay them off at the end of the month for the next billing cycle. Keeping high balances on your credit card(s) can have a substantially negative impact on your credit score.
• Don’t bother with any new credit cards: Your credit worthiness is also affected by how long you’ve had your accounts open, and newer accounts can have a detrimental effect on your overall credit score immediately.

When all is said and done, the best way to improve your credit worthiness is by proving yourself by using credit responsibly over time. There are no shortcuts to getting a good credit score, and anyone who tells you there are should be hung up on or walked away from.